Gregg v. Revelle

Filed 10/4/06 Gregg v. Revelle CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of the Superior Court of San Diego County, Kevin A. Enright, Judge. Affirmed.

Cross-complainant and appellant John L. Gregg, Trustee of the Trust Under the Will of J. Lee Gregg, appealed a judgment favoring cross-defendant and respondent William Revelle on Gregg's first amended cross-complaint for fraud/deceit entered after the court granted Revelle's motion for summary judgment. We rejected Gregg's claims and affirmed the judgment. Revelle then moved in the trial court for attorney fees and costs. The trial court awarded Revelle $446,507.50 in attorney fees. Gregg appealed. This court reversed, finding the trial court abused its discretion in making the award. Gregg then moved for his attorney fees and costs incurred in defending against Revelle's fee motion. Revelle renewed his motion for fees and costs. The trial court denied Gregg's motion and granted Revelle $473,832.50 in attorney fees and $1,926.70 in costs. Gregg appeals, arguing the trial court erred in denying his motion and granting Revelle's.

BACKGROUND

A. Underlying Case

Cisterra Partners (Cisterra) attempted to purchase valuable real property from the San Dieguito Partnership (SDP). When the sale was not consummated, Cisterra, on April 6, 2000, filed a first amended complaint against SDP, SDP partners Gregg, Revelle and others, alleging fraud, breach of contract and other legal theories. In September 2000 Gregg cross-complained, alleging causes of action against Revelle and others for fraud. In April 2001 Revelle and Cisterra entered into a settlement and Revelle was dismissed from Cisterra's first amended complaint. The trial court granted Revelle's motion for summary judgment as to Gregg's amended cross-complaint and on October 2, 2001, judgment was entered in his favor. Gregg appealed and in an unpublished opinion (D038961) filed on October 1, 2002, this court affirmed. From September 2000 to April 2001 Revelle defended against both Cisterra's complaint and Gregg's cross-complaint.

B. First Motion for Attorney Fees

Revelle filed a motion for an award of attorney fees and costs based on a contractual agreement between the parties allowing such recovery. Gregg opposed the motion, arguing Revelle failed to show the requested amounts were reasonable and properly apportioned between Revelle's defenses to the various actions. The trial court issued a telephonic ruling awarding Revelle attorney fees in the amount of $436,520. Gregg requested oral argument. After argument the court invited the parties to meet and confer concerning the further production of billing statements. The parties were unable to reach an agreement concerning the production of such materials.

The trial court awarded Revelle $446,507.50 in fees. Gregg appealed.

On appeal this court noted Revelle provided the trial court highly redacted billing information. It believed the information sufficient. It noted litigation was ongoing between the parties and Gregg refused to stipulate that no information provided by Revelle would waive the attorney-client or work-product privileges. The parties were unable to reach an agreement concerning providing more detailed billing records.

In our opinion reversing the award, we reviewed the law concerning the evidence necessary to allow a proper award of attorney fees. We found the highly redacted evidence provided the trial court by Revelle was insufficient to allow it to determine a proper award. We discussed what types of information could be provided without disclosing attorney-client communications or attorney work product.

C. Gregg's Motion for Attorney Fees

On March 14, 2005, Gregg moved for attorney fees in the amount of $86,032.50 and costs in the amount of $2,743.26 based on the claim he was the prevailing party in Revelle's motion for attorney fees. Gregg noted the limited partnership agreement provides that the prevailing party in any dispute whether or not resulting in litigation was entitled to attorney fees.

Revelle opposed the motion, arguing he was the prevailing party in the underlying litigation. Revelle argued the matter was before the trial court after reversal by the Court of Appeal only for a recalculation of Revelle's fee. Revelle argued Gregg was not the prevailing party either in the underlying contract dispute or on in the attorney fee proceeding.

D. Revelle's Motion for Attorney Fees

In May 2005 Revelle, arguing he, not Gregg, was the prevailing party in the underlying contract action, moved for his attorney fees in the amount of $468,800 and costs in the amount of $1,926.70.

Gregg opposed the motion. He argued this court's opinion reversing the first award of attorney fees to Revelle was based on a finding the evidence offered in support of the motion was insufficient. Citing the doctrine of law of the case and Code of Civil Procedure section 1008, Gregg argued Revelle was foreclosed from renewing his fee motion. Gregg argued in any case the evidence submitted by Revelle in his new motion was insufficient.

E. Ruling on Motions

The trial court found Revelle's motion was not barred either by the doctrine of law of the case or Code of Civil Procedure section 1008. The court noted a general reversal merely returns the parties to their positions prior to the entry of the reversed judgment. As to the claim that a reversal based on insufficiency of the evidence forecloses relitigation of the matter, the trial court noted this court's reversal was not based on a finding of insufficient evidence but rather on an abuse of the trial court's discretion in setting the amount of fees without additional documentation. The trial court noted this was not a situation in which a party failed to present sufficient evidence on an element of a cause of action. As for Gregg's Code of Civil Procedure section 1008 argument, the trial court found the section applied only to a challenge made in the court rendering the judgment and was not applicable to a remand from the Court of Appeal.

The trial court noted Revelle was indisputably the prevailing party in the underlying action. The trial court reviewed the documentation presented by Revelle and awarded him $473,832.50 in attorney fees and $1,926.70 in costs.

The trial court denied Gregg's request for attorney fees arising from this court's reversal of the first award of fees to Revelle. The court concluded the fee provision of the limited partnership agreement did not entitle Gregg to fees. The court stated that once Gregg's interest in the partnership was bought out on January 1, 2001, Gregg was no longer a partner and could not rely on the partnership agreement for a basis for his claim of entitlement to fees. The court noted that in any case Gregg was not entitled to fees based on his temporary victory arising from his appeal of the first fee award. The court awarded Gregg $2,191.65 for his costs on appeal based on this court's order that he recover such costs.

DISCUSSION

A. Revelle's Motion for Attorney Fees

Gregg argues the trial court erred in granting Revelle's fee request. Gregg concludes our prior opinion reversing the grant of attorney fees to Revelle was based on a finding of insufficient evidence to support the grant. Noting the general rule that reversals based on findings of insufficient evidence foreclose retrial, he argues the trial court erred in considering Revelle's motion for attorney fees. Citing Code of Civil Procedure section 1008, subdivision (b), Gregg argues that in any case Revelle's renewed motion for fees could only be heard if he presented evidence that was unavailable at the time of his original motion for attorney fees. Finally, Gregg argues even if Revelle's motion for fees was properly considered by the trial court, the evidence was still insufficient to support it.

1. Motion for Fees After Reversal

Gregg characterizes our reversal of the first grant of attorney fees to Revelle as based on a finding of insufficient evidence. He argues such a reversal foreclosed reconsideration of Revelle's fee request in the trial court.

As a general rule on reversal the matter returns to the trial court for retrial as if the appealed judgment had never been entered. (Weisenburg v. Cragholm (1971) 5 Cal.3d 892, 896.) There are several exceptions to this general rule. Gregg relies on the exception that the rule is inapplicable when the trial court denied a motion for judgment notwithstanding the verdict and the appellate court reverses the judgment for insufficiency of the evidence. The rationale of these cases is that the plaintiff has had a full and fair opportunity to present the case, there is no new evidence to present on retrial, and the appellate court has determined that on the facts presented, as a matter of law, there can be no recovery under the claim. (McCoy v Hearst Corp. (1991) 227 Cal.App.3d 1657, 1661; Bank of America v. Superior Court (1990) 220 Cal.App.3d 613, 625-626.)

We did not intend our unqualified reversal to foreclose on remand the introduction of additional evidence in support of Revelle's motion for attorney fees. A motion for fees presents evidentiary issues different from those in a trial arising from some tortious or contractual, etc., cause of action. The exact type, amount and spirit of evidence necessary to support a particular fee award is not a clearly settled matter. Depending on the type of case and the fees issues raised, the evidence necessary to support an award may vary greatly. (See Gregg v. Revelle (Nov. 17, 2004, D042138) [nonpub. opn.], pp. 7-10.)

Central to the rationale of the insufficiency of evidence exception to the unqualified reversal rule is that the party seeking to relitigate a matter after reversal had a full and fair opportunity to present his case in the first proceeding. At its core our reversal of the first award of attorney fees was based on the conclusion that neither party had a fair opportunity to present its case concerning the reasonability of the fees sought. Revelle presented insufficient evidence concerning billing to allow Gregg to adequately defend and the trial court to determine a fair award. Revelle clearly had additional evidence he could present but was not required to do so when the trial court determined that based on its extensive knowledge of the case, the billing records presented and the declarations of counsel it could fairly determine the award. Given the less than precise rules for what evidence is sufficient to support an award of attorney fees, it would have been unfair to both parties not to reverse this case for a new hearing on the matter.

Neither was the presentation of new evidence foreclosed by Code of Civil Procedure section 1008, subdivision (b). That section allows reapplication by a party for an order that was initially "refused in whole or part, or granted conditionally or on terms," only when there exists "new or different facts, circumstances, or law."

The purpose of the section is to conserve judicial resources by preventing a party from repeatedly bringing the same motion. The section has no application when the court on its on motion reconsiders a previous ruling. (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1096-1097, 1100, 1108.)

The present grant of Revelle's motion for attorney fees did not arise from a reapplication for those fees. In essence Revelle made one motion for fees following the grant of his motion for summary judgment. This court found error in the first award. It was our intent the issue be readdressed in light of our opinion. Code of Civil Procedure section 1008 had no application to that reconsideration.

2. Second Award of Attorney Fees to Revelle

Gregg argues even if the trial court properly considered Revelle's motion for attorney fees, it erred in granting them. Gregg argues the evidence was again insufficient to support the award. More specifically, he argues the evidence did not demonstrate the reasonableness of the fees sought and was inadequate to allow apportionment of his attorney fees between those expended in defending the Cisterra action and those incurred to the defend Gregg's cross-complaint.

a. Revelle's Prior Motion for Attorney Fees and Trial Court Ruling

After this court affirmed the judgment in favor of Revelle on Gregg's cross-complaint, Revelle filed a motion in the trial court seeking attorney fees. Revelle alleged the reasonable attorney fees incurred in defending against Gregg's cross-complaint was $405,304.50. This "lodestar" amount was calculated by multiplying the hourly rate for each of the legal professionals who worked on the defense by the hours expended by each. Revelle argued the matter was a complex one requiring a high level of legal skill and no reduction in the lodestar amount would be reasonable.

Attached to the motion was the declaration of one of Revelle's attorneys relating hourly rates, the education and experience of the lawyers on the case and the hours expended by various legal professionals on the defense to Gregg's cross-complaint. The declaration noted the total amount of legal fees incurred by Revelle since the inception of the original action filed by Cisterra was $1,304,500.

The declaration stated Revelle was not claiming fees for the time spent on claims unrelated to Gregg's cross-complaint. The attorney stated: "Where a professional's time on a certain day was spent on issues or tasks unrelated to the Cross-Complaint, that time has been excluded from the fees claimed by Revelle. Where a professional's time on a particular day was spent partially on issues or tasks unrelated to the Cross- Complaint, and partially on related issues or tasks, I have estimated a reasonable and appropriate split of time, based upon my knowledge of the procedural and substantive history of this action and [the firm's] work, and have excluded the appropriate time from the fees claimed by Revelle."

Attached to the motion was a chart summarizing by month beginning in May 2000 the total fees and costs charged Revelle and that portion of the fees attributed to the defense against Gregg's cross-complaint.

Also included were summary pages from Revelle's monthly billings by the law firm. The declaration stated that detailed invoice information supplied by Revelle were not included in the motion because of the concern that including them would waive the attorney-client privilege. Revelle's attorney stated the detailed invoices would be provided if requested to the trial court for its in camera review.

In his motion to tax costs and fees, Gregg argued that because Revelle failed to present his complete billing invoices itemizing what matters were worked on by whom, it was impossible to challenge and for the trial court to determine the reasonableness of the fees sought. In so arguing, Gregg noted his cross-complaint was only part of a complex legal matter involving Revelle, Gregg and SDP and that Revelle and his counsel were working on many of these matters at the same time.

Gregg argued that without access to the complete billing statements concerning Revelle's legal representation in these matters, it was impossible to determine the reasonableness of the fees sought for the defense against Gregg's cross-complaint. Gregg argued these matters were not protected by the attorney-client privilege since any such privilege was waived when Revelle sought to recover reasonable attorney fees. Gregg argued that in any case the requested fee award was excessive given the case involved.

Revelle filed in support of his motion for attorney fees heavily redacted copies of the billing statements from counsel. The statements had tables listing dates on which services were provided, the initials of the person providing them and the hours expended. As to some of those hours, a description was provided of the task on which the time was spent. Those descriptions are redacted such that lines of description are marked out leaving only a word or two, for example, "research" or "review" or "telephone conference."

Gregg replied these records were insufficient to allow a determination of reasonable fees.

Revelle argued he had submitted more information than required to support his claim of reasonable fees. Revelle stated it was necessary to redact the billing statements since Gregg refused to stipulate that no information so acquired would waive the attorney-client or work-product privileges or be used in the parties' continuing legal actions. Revelle noted Gregg recently filed a new lawsuit against him.

Revelle argued the attorney fees sought were reasonable given the complexity of the case, the expertise of his counsel and the dire consequences to Revelle if he did not prevail against Gregg's cross-complaint.

By telephonic ruling the trial court granted Revelle's motion for fees in the amount of $436,520. The court found the fees sought were reasonable. The court held the supporting information submitted by Revelle exceeded that required under California law.

At Gregg's request, oral argument was held on the matter. After hearing the parties, the trial court noted it presided over the lengthy proceedings in the case. It reviewed "cartloads" of documents and reviewed the appellate aspects of the case. It considered the complexity of the matter and the result that counsel for Revelle achieved. The trial court asked counsel for Gregg if he was still unwilling to stipulate that if more detailed billing statements were provided it would not constitute a wavier of any privilege and would not be used for any purpose other than determining the reasonableness of the fees sought. Counsel stated he did not have the authority to so stipulate but it might be possible to enter such a stipulation if the details could be agreed upon.

The matter was taken under submission for two weeks to determine if a stipulation could be reached concerning Revelle providing Gregg more detailed billing records.

The parties later informed the trial court they were unable to reach agreement on a stipulation. By letter Gregg informed the court he was willing to enter into a stipulation that no privilege would be waived by submission of the billing records and that such records would only be used in the fee dispute only if the records provided were unredacted. Revelle was not willing to do so.

In response the trial court affirmed its telephonic ruling and awarded Revelle $446,507.50 in attorney fees.

b. Reversal of First Award of Attorney Fees

In our opinion reversing the first fee award, we noted: " '[T]he "experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong." ' [Citation.]" (Gregg v. Revelle, supra, D042138, p. 7.) We observed that courts consistently found fees may be awarded even in the absence of detailed time sheets. (Gregg v. Revelle, supra, D042138, pp. 9-10; see generally Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 255; Weber v. Langholz (1995) 39 Cal.App.4th 1578, 1587; Sommers v. Erb (1992) 2 Cal.App.4th 1644, 1651 (Sommers); Pearl, Cal. Attorney Fee Awards (Cont. Ed.Bar 2d ed. 1994) § 14.32, pp. 435-436.)

In some situations, however, more detail is required. We noted that in "Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672, 689 (Bell), the successful plaintiff prosecuted tort claims as well as Brown Act causes of action. Fees were recoverable only on the Brown Act causes of action. The attorney for the prevailing party submitted a declaration and blocked-billing records that did not describe tasks performed with any specificity. We found this record insufficient to support an award of attorney fees. We stated: '[T]he blocked-billing entries render it virtually impossible to break down hours on a task-by-task basis between those related to the Brown Act violation and those that are not. If counsel cannot further define his billing entries so as to meaningfully enlighten the court of those related to the Brown Act violation, then the trial court should exercise its discretion in assigning a reasonable percentage to the entries or simply cast them aside.' [Citation.]" (Gregg v. Revelle, supra, D042138, pp. 8-9.)

We concluded a general description of work performed that is redacted to delete privileged material may be sufficient to support an award of fees. We concluded in this case, however: "The general statement that in Revelle's attorney's view all the hours Revelle was seeking were all devoted to defense of the cross-complaint and all were reasonable under the circumstances, supplemented only with billing records which do not provide any information which connects the tasks performed to the cross- complaint, do not meet the minimal requirements of [case law]. The record presented by Revelle would not support any conclusion about whether the fees claimed were connected to the cross-complaint, let alone their reasonableness under the circumstances. Some description of the pleading, discovery, motion, or portion of trial preparation, to which any of the billed tasks was related is needed so that the trial court can determine whether the hours spent on a particular task were reasonable and importantly whether they were related to the cross-complaint rather than the other portions of the complex litigation. Such a description can be provided without disclosing any attorney-client communications or attorney work-product.

"In sum the records provided the trial court were simply too fragmented and incomplete for it to properly exercise its discretion in awarding fees." (Gregg v. Revelle, supra, D042138, pp. 9-10)

c. Revelle's Renewed Motion for Fees

In May 2005 Revelle, arguing he was the prevailing party in the underlying contract action, moved for his attorney fees in the amount of $468,800 and costs in the amount of $1,926.70. Revelle argued the documentation submitted with the renewed motion corrected the deficiencies cited by this court in reversing the first award of fees, i.e., that the highly redacted billing records submitted by Revelle made it impossible to reasonably determine the reasonableness of the fees and their proper apportionment between the two actions against Revelle.

Revelle, now represented by new counsel, noted that in April 2000 he and Gregg were sued by Cisterra. In September 2000 Gregg filed his cross-complaint against Revelle. Revelle settled with Cisterra in April 2001. Revelle stated, therefore, the only period during which apportionment of fees was an issue was between September 2000 and April 2001.

Revelle's new counsel obtained the billing records from the firm that represented him in the underlying litigation. Those records were reviewed and only the time entries clearly revealing attorney-client communications were redacted from the records submitted to the trial court. Revelle submitted with his renewed motion the declarations of counsel concerning billing submitted with his first request for fees that explained the computation of the fee award sought and the records submitted with those declarations.

Revelle offers billing records for the months during which he was defending against both the Cisterra and Gregg actions. The records show the date of work, the initials of the legal professional doing the work, the amount of time expended and a short description of the work done. The record also documents costs associated with the case and provides a summary of the amounts charged Revelle.

d. Award of Attorney Fees

The trial court noted no apportionment of fees was necessary after May 1, 2001, because by that time Revelle had settled with Cisterra. As to the period from September 2000 when Gregg filed his cross-complaint to April 2001 when Revelle settled with Cisterra, the court noted Revelle was seeking $80,482.50 in fees for his defense of the Gregg cross-complaint. This amount was approximately one-sixth of the total billed by counsel for the period in which Revelle was defending against both actions. The trial court reviewed the pleadings in both cases and found that apportionment reasonable. The trial court further concluded the detailed billing records submitted by Revelle with his renewed motion for fees were adequate to allow a determination of the reasonableness of the fees sought and the correctness of the claimed apportionment.

The court awarded Revelle $473,832.50 in total fees and $1,926.70 in costs.

e. Discussion

The trial court's award of attorney fees to Revelle was proper.

"[A]n experienced trial judge is in a much better position than an appellate court to assess the value of the legal services rendered in his or her court, and the amount of a fee award by such judge will therefore not be set aside on appeal absent a showing that it is manifestly excessive in the circumstances." (Children's Hospital & Medical Center v. Bonta (2002) 97 Cal.App.4th 740, 782.)

"An abuse of discretion is shown when the [attorney fee] award shocks the conscience or is not supported by the evidence." (Jones v. Union Bank of California (2005) 127 Cal.App.4th 542, 549-550.)

This court reversed the first award of attorney fees to Revelle because the billing records he submitted were so redacted they did not reasonably allow Gregg to question or the trial court to decide either the reasonableness of the fees or their proper apportionment between defense of the Cisterra and defense of the Gregg actions. (Gregg v. Revelle, supra, D042138, pp. 7-10.)

The documentation submitted with Revelle's renewed motion for attorney fees is more revealing. The records state the date work was done, the initials of the professional who did the work and give a description of the work. In some cases that description refers specifically to work done with regard to Gregg's cross-complaint. In some cases no such reference is made. Nonetheless, a trial judge aware of the dates on which various events occurred in the Cisterra and Gregg matters could, with the aid of the billing records submitted, make a reasonable judgment concerning the apportionment of time on the cases claimed by Revelle. The description of the work done also provided the trial judge with sufficient information to determine the reasonableness of the fees charged.

The trial court did not abuse its discretion in awarding Revelle attorney fees and costs on the information provided.

B. Gregg's Motion for Attorney Fees

Gregg argues the trial court erred in denying him attorney fees incurred in defending Revelle's fee motion. Gregg first argues the trial court's ruling that because his interest in the partnership was bought out in January 2001, the fee clause in the partnership agreement did not apply to him and he could not use it as a basis for recovering his attorney fees was in error. Gregg then argues that an attorney fees claim is entirely ancillary to the underlying lawsuit, it is a separate dispute under the fee clause of the partnership agreement. Thus, while he was not the prevailing party in the underlying real property action, he is the prevailing party with regard to Revelle's attorney fee claim arising from that action. Gregg argues he is, therefore, entitled to his attorney fees incurred in defending Revelle's fee claim.

Putting aside all other considerations, there is no manner in which Gregg is a prevailing party. Gregg lost in the underlying real property action. In the first proceeding in the trial court arising from Revelle's motion for fees, Gregg also lost. Gregg did prevail in this court and the first fee award to Revelle was reversed. The matter, however, as we have noted above, was remanded to the trial court for a new hearing on Revelle's fee request. At that hearing Gregg again lost and Revelle was awarded his attorney fees. We have now affirmed that award. The result of the proceedings is as the matter is now decided that as to both the underlying action and the attorney fees claims, Revelle, and not Gregg, is the prevailing party. The trial court acted properly in denying Gregg's request for fees.

The judgment is affirmed. Revelle is awarded costs on appeal.

BENKE, Acting P. J.

WE CONCUR:

HUFFMAN, J.

AARON, J.

Publication courtesy of California pro bono lawyer directory.

Analysis and review provided by Chula Vista Property line attorney.